Public and private cooperation
Today, the cost of emitting CO2 is significantly lower than the cost of capturing and storing it. There are also other barriers to investment in CCS. Consequently, both government funding and cooperation between public authorities and industry are essential to realising Longship.
Norway’s experience of planning full-scale CCS projects that were never realised laid the foundation for a new approach to CCS in Norway. Gassnova’s report, “Study Report on Potential Full-Scale CCS Projects in Norway”, published in May 2015, identified several emission sources and storage sites where CCS could be technically feasible, as well as industrial companies that could serve as potential partners. The study also identified key barriers to investment for industry, assessed project risks and proposed a way forward. It laid the groundwork for what would later become Longship.
Segmentation of the CCS Value Chain in Norway
One of the lessons learned from efforts to establish CCS projects in Europe as a climate mitigation measure is that industrial partners may find it challenging to assume responsibility for risks associated with parts of the CCS value chain beyond their control. Against this background, it was decided to establish separate agreements between the Norwegian state and the industrial partners responsible for the different parts of the CCS value chain in Longship. Gassnova is responsible for coordinating the industrial partners across the value chain throughout the various phases of the project. This includes the overall design of the value chain, management of interfaces and coordination of project schedules.
“(…) it can be challenging for industrial partners to assume risks associated with parts of the CCS value chain over which they have no control.”
Sharing of Costs and Risks
The Norwegian government has entered into separate funding agreements with the industrial partners Heidelberg Materials, Hafslund Celsio and Northern Lights JV to provide financial support for CO2 capture, transport and storage. The agreements cover both capital investments in facilities and operating costs over a ten-year period. Costs are shared between the government and the industrial partners, and the agreements also help reduce the partners’ financial risks.
Gassnova’s Role
Overall responsibility for Longship rests with a steering committee comprising representatives from the Norwegian Ministry of Energy and Gassnova. Gassnova is responsible for overseeing the overall planning of the full-scale CCS project and administering the study contracts with the industrial partners. Gassnova has also coordinated the interfaces between the industrial partners, evaluated their projects following the completion of front-end engineering and design (FEED), and provided technical advice to the Ministry of Energy.
In addition, Gassnova is responsible for coordinating the work on benefits realisation. This involves helping to ensure that the Norwegian government achieves its objectives for Longship and that the experience and knowledge gained from the project benefit future CCS projects. All parties involved in Longship contribute to this work, with knowledge sharing playing a central role.